Suppliers save $19.3bn by cutting emissions

Purchasing power from leading companies has cut millions of tonnes of CO2 from supply chains and led to cost savings of $19.3bn, according to a report.

In the report environmental reporting organisation CDP said data from more than 5,500 suppliers over a decade showed 633m tonnes of CO2 had been saved and this was “associated with annual monetary savings in excess of $19.3 billion for those companies, highlighting the frequently compelling business case for taking action on climate change”.

Sonya Bhonsle, global head of supply chain at CDP, said: “Leading purchasers are using disclosure to push positive change down the supply chain, with data playing an increasingly important role in their decision-making.

“If suppliers continue to cascade good practices further down the supply chain, this has the potential to play a huge role in the rapid transition to a sustainable, low-carbon economy.”

The report found a 35% increase in water-use targets among suppliers between 2017 and 2018 and a tripling in the number of companies reporting to customers on forest-related impacts over the same period.

A survey showed three quarters (73%) of buyers were deselecting, or considering deselecting, suppliers based on their environmental performance.

CDP has a membership of 115 purchasing organisations around the world, including Dell, Unilever and Walmart, representing $3.3tn in procurement spend. Over 10 years disclosure requests have been made to 11,692 suppliers, of whom 5,545 responded on climate change.

Bhonsle said that “with only 57% of suppliers reporting emissions reductions activities, and less than half (47%) with emissions reduction targets in place, the transformation in their customers’ expectations means that those suppliers failing to act sustainably may increasingly see it impact their bottom line”.

The report, giving examples of actions by suppliers to cut emissions, said French food company Danone worked with the farming industry to avoid water contamination from fertiliser, creating a biodigester that converts 40,000 tons of organic waste each year into natural fertiliser.

Microsoft invested more than $1m with one manufacturing supplier to install solar arrays and complete an “energy-smart building retrofit” to reduce energy consumption.

L’Oréal has been training and supporting its suppliers to improve their carbon footprint while Swedish packaging company Tetra Pak has enforced third-party verification that its paperboard suppliers do not use wood from any form of deforestation.

In a separate announcement, Nestlé has disclosed full data on suppliers and priority commodities including soya, meat, hazelnuts and vanilla. Data on further commodities including seafood, coconut, vegetables, spices, coffee, cocoa are due to be published by mid-2019.

CDP is a global environmental impact non-profit that drives companies and governments to reduce their greenhouse gas emissions, safeguard water resources and protect forests.